Context and Legal Background
Spain’s special tax regime for inbound workers (Article 93 of the Personal Income Tax Law — LIRPF) allows qualifying individuals who relocate to Spain to opt for taxation under the rules of the Non-Resident Income Tax (IRNR), while maintaining their status as Spanish tax residents. The regime aims to attract international talent by applying a flat tax rate (24 % up to €600,000 and 47 % thereafter) to employment income earned during the period of application, typically six years.
However, determining what constitutes income “obtained during the application of the regime” can create complexity, especially when deferred or retrospective remuneration is involved. A recent binding ruling of the Spanish Tax Authority (DGT V1112-25, 26 June 2025) addressed this question in the context of a bonus paid after the individual had moved to Spain and joined the special regime.
The taxpayer had lived and worked in Israel until 31 December 2023, maintaining tax residence there. On 1 January 2024 she relocated to Spain, continued working for the same employer, and opted for the inbound workers’ regime. Her January 2024 payslip included a bonus relating to performance in 2023 — the period prior to her transfer. The key issues were whether such a bonus must be declared in Spain and whether Israeli social security contributions could be deducted in her Model 151 return.
DGT Reasoning
The DGT began by confirming that Article 93 LIRPF, together with Article 114 of the Regulation (RIRPF), governs the scope of income covered by the special regime.
Article 114.2(a) expressly excludes from the regime any income “derived from activities performed before the date of transfer to Spanish territory.” Consequently, remuneration earned for services rendered prior to arrival in Spain does not qualify as income obtained “during the application of the regime.”
Applying this rule, the DGT considered that the 2023 bonus corresponded entirely to work performed in Israel, i.e., before the taxpayer became a Spanish resident under the special regime. Therefore, under Article 13.1(c) of the Non-Resident Income Tax Law (TRLIRNR), the income could not be regarded as obtained in Spain, since it did not derive, directly or indirectly, from personal activity carried out in Spanish territory.
Accordingly, the bonus was not subject to taxation in Spain, even though it was paid while the taxpayer was already under the inbound workers’ regime. The place and period in which the underlying services were performed take precedence over the timing of payment.
Regarding the second question — the deduction of social security contributions in Model 151 — the DGT recalled that Article 24(6) TRLIRNR allows certain deductions for EU residents when calculating the taxable base for income obtained without a permanent establishment. This provision, however, does not apply to inbound workers, who are deemed residents in Spain for all tax purposes. Consequently, payments to foreign social security systems cannot be deducted when determining tax liability under the regime.
Implications for Taxpayers
This ruling clarifies that, under Spain’s inbound workers’ regime:
- Employment income relates to the period and location in which the work was actually performed, not the moment of payment.
- Bonuses or deferred compensation referring to pre-arrival work remain outside the scope of Spanish taxation.
- Contributions to foreign social security systems are not deductible under Model 151, as inbound workers are treated as Spanish residents.
For employers and employees alike, the decision underscores the importance of aligning payroll practices with the employee’s relocation timeline. Deferred or year-end bonuses should be assessed according to the period of service to prevent double taxation or unintended Spanish reporting obligations.
Conclusion
DGT V1112-25 confirms a strict interpretation of Article 114 RIRPF: only remuneration linked to duties performed after the date of transfer qualifies as income “obtained during the regime.” Bonuses or similar payments for prior work abroad fall outside Spanish tax jurisdiction, even if paid after relocation. This outcome reinforces the territorial focus of the inbound workers’ regime and provides welcome certainty for internationally mobile executives whose compensation includes deferred elements.
